The Building Boom’s Foundation

What is supporting the explosion of healthcare construction?By Jonathan Anschutz and Caroline Anschutz

In early 2005, The Journal of Healthcare Contracting reported that hospital construction was estimated at $16 billion for the year 2004. By June 2006, the United States saw a 29 percent increase in hospital construction over the previous year, according to the Association of General Contractors of America. Healthcare construction is obviously a business that will continue to boom in the foreseeable future. In fact, Connie Harmsen of the architectural firm Orcutt/Winslow Partnership (Phoenix) reports that over the next 15 years, it is estimated the country will spend $200 billion on healthcare construction. Obviously, this a positive sign that the IDNs are able to expand.

Healthcare construction is evolving at a pace that may surprise many. In hospital construction the days of so-called “cookie cutter” designs that don’t take into account unique needs are for the most part gone. The healthcare industry as a whole is weighing the pros and cons and the impacts of evidence-based design. Designers, architects, and construction and healthcare executives must consider the needs of an aging population and work force, evolving technology, patient safety, disaster preparedness, environmental responsibility, upfront and operating costs, return on investment, and competition in the marketplace. Innovative ideas are developing that should allow them to meet these challenges and others not yet on the horizon. Here’s a look at some of these challenges and ideas.

Making the most of new construction
If the healthcare industry is going to spend $200 billion on construction over the next 15 years, Harmsen says, “We must maximize this opportunity to create facilities that will service the healthcare community for the next 50 to 100 years.” Harmsen and Neil Terry, the company’s director of the Center of Excellence in Healthcare Design, take a more proactive, modern approach to design and construction.

Terry, a 20-year veteran of the company, explains. “It’s so easy as architects and designers use what is traditionally accepted as a standard. But healthcare is probably as dynamic a field as you can get into, and we’re asking our clients about the issues they feel are important.”

Harmsen has worked in healthcare on various levels, and previously served as CEO of Phoenix-based Banner Estrella Medical Center, working with Orcutt/Winslow to design that facility. She says there are six different factors that impact design and construction: the aging population and aging workforce; technology; healthcare costs; quality and patient safety efforts; emergency room saturation and disaster preparedness; and the four Ms (a multi-generational, multi-cultural, and multi-national workforce, and meaningful work).

The baby boomer generation is aging and so is the work force, such as nurses that care for those baby boomers. “The average nurse is 47 years old,” Harmsen says. It is key to take into account the workforce and “include design elements that benefit everybody and prolong their ability to work,” Terry says. Good examples of such factors include better lighting and ergonomics.

Andrew Jarvis, AIA, a principal at Philadelphia-based EwingCole, adds that nurses have one of the highest injury rates of any profession. “In healthcare, the highest costs, outside of technology, are for employees.” Layouts must be designed with employee safety and efficiency in mind.

A healthcare system could spend millions of dollars on technology, “and the challenge is that costs keep going up,” Terry says. General IT concerns, the area of genomics, telemedicine, paperless systems, and the space technology requires are especially important when designing a hospital. Jarvis says, “Technology demands efficiency” to recoup costs. Also, some rooms, such as operating rooms, must be much larger to accommodate new technologies, Jarvis says, yet “you don’t need a big room for medical records anymore.”

Technology is also “a wave that’s accelerated, that’s hard to pin down,” says Jarvis. He and his company have had to design for technology that doesn’t yet exist.

Harmsen says other impacts on design and construction are quality and patient safety efforts, which are often driven by consumers. “For example, we want to do whatever we can to create a patient care room that helps minimize infections,” she says.

Design considerations must also encompass trends like disaster preparedness and ER saturation. “One of the things we learned from [Hurricane] Katrina, is that when you put your emergency generator in the basement, what do you do when it floods?” Terry says. And misuse of ERs for primary care are making fast track designs attractive. But Terry asks, “Do you design a separate area for the fast track or design for true flexibility?”

Finally, the four Ms address how people of different ages and ethnicities work together and how to design a hospital that allows for the best possible, and meaningful, work experience. To recruit from a demanding workforce, “We need to design areas that are better than just an employee lounge,” says Terry. “It’s good to have the ability to get away from the stress of work.”

In relation and in addition to these six factors, “You always have the group that thinks of the bottom line and how to keep first-time costs down,” says Terry. The challenge is to think beyond the first initial capital expenditure and look at the cost-savings in the long run.

Do for-profit and non-for-profit organizations approach costs in different ways? “Both are driven by the bottom-line, because they have to be to survive,” Jarvis says. However, when dealing with market and brand, there is sometimes a difference. The not-for-profits are not always interested in the “whiz-bang equipment that will get them noticed,” explains Jarvis. “They want to know the efficacy of the equipment.” As far as for-profits go, “If payback on capital equipment is longer than 10 years, forget it.”

Whatever the motivation, it’s true that hospital administrators tend to “think in the traditional sense of hospital design,” Terry says. “If we can take one issue from every project and create information to share with others, everyone benefits.”

Designing for the people
Gregory L. Olsen, MLA, owner and founder of State College, Pa.-based Patina Consultants, agrees that the traditional sense of design just doesn’t work anymore, at least for healthcare. While constructing areas for new technology is important, the patient and caregivers also deserve special attention. “If they can take five or 10 minutes to go outside and sit in a garden … it reduces their stress almost immediately,” Olsen says. “That’s where evidence-based design comes in.”

Evidence-based design, explains David Kamp, ASLA, LF, founding principal of the landscape architectural firm New York City-based Dirtworks, PC, Evidence-Based Design attempts to identify the characteristics of an environment that cause specific responses (both positive and negative), works with those characteristics during the design process. The impact or outcomes of specific design decisions are then measured and studied. In Kamp’s experience, “there is a growing awareness that the physical environment … affect(s) the way we feel and respond to the world. We become mindful of a more sensitive and sustainable approach to building.”

John Kouletsis, Director of Planning and Design Services for Oakland, Calif.-based Kaiser Permanente, however, is troubled that the term evidence-based design is often used incorrectly in healthcare. He says that evidence-based design ideas may have little or no supporting evidence at all. In an effort to better understand how surroundings affect patients, Kaiser is developing a strategic collaboration with Georgia Tech and other healthcare architecture, planning and design organizations to further research evidence based design initiatives. “Architects and engineers are very good at coming up with out-of-the-box ideas, but they aren’t sure how to test it.” Additional research, he says, will “advance the whole notion of evidence-based design.”

Evidence-based design, although a fairly recent concept in terms of healthcare, is evolving. Using those ideas as his premise, Gregory Olsen developed a new method of healthcare delivery that is inspired by the resident model developed by McLean, Va.-based Sunrise Senior Living and the holistic, patient-focused model espoused by Derby, Conn.-based Planetree Inc. The model, called PatinaCare™, develops empty neighborhood lots and underused or abandoned buildings in order to embed healthcare delivery into existing neighborhoods rather than on large tracts of land further away from more dense populations.

Patients receiving care at home or in their neighborhood, where they recognize people and places, will recover more quickly. Providers will see that this model “will reduce costs all across the board,” says Olsen, by as much as 50 percent, in addition to construction costs saved by renovating existing structures. Lower provider costs will translate to lower insurer costs, meaning lower premiums for patients and potentially better reimbursements for providers.

This model works in rural and urban areas. “Cities are clusters of neighborhoods,” says Olsen. “Once I establish PatinaCare on a neighborhood scale, I can take PatinaCare to any neighborhood.”

It’s not easy being green – or is it?
Current design concerns are not just about reduced-stress settings and healing gardens. Green design is a growing phenomenon and many hospitals want to be more environmentally friendly. For example, Kaiser partnered with manufacturers Collins and Aikman for PVC-free carpeting; Nora Rubber Flooring for rubber flooring; Construction Specialties Inc. for PVC-free wall guards, corner guards, and bumper rails; and Otis Elevators for its GenII energy efficient elevator system. “We say that if the industry partner is willing to rise to the challenge, we’ll go there with them,” says Kouletsis.

Seattle-based Providence Health & Services integrated patient-friendly and green designs together in June 2006 when it opened Providence Newberg Medical Center (Newberg, Ore.), which uses 100 percent outdoor air and green power throughout the facility. All lights are controlled by occupancy sensors, and the building is filled with natural light. The building earned the U.S. Green Building Council’s Gold LEED (Leadership in Energy and Environmental Design) certification.

Jarvis says that LEED certification “is a scorecard system that gives you points for achieving energy efficiency, being easier on the environment and air quality, using recyclable and non-toxic construction materials, and not building in areas like agricultural land or virgin forests.”

However, according to the U.S. Green Building Council, as of September 2006, less than 3 percent of all new construction projects registered for LEED certification were healthcare facilities. The reason, according to Jarvis, is because health systems “balk at the onerous requirements.”

Larry Bowe, CEO of Providence Newberg, disagrees. “It’s the right thing to do and operationally, it makes sense.” Bowe adds that his employees and patients are happier, and the public is proud of the building. Jarvis says while LEED certification may cost more up front, a provider will recoup that investment through its energy savings in a matter of years. Providence Newberg expects to recoup its initial investment within 14 months of opening.

This may not hold true for all facilities. “The normal statistic,” says Jarvis, “is that LEED might cost you 10 percent more up front, but you recoup that in 10 years.” As Kouletsis points out, healthcare providers do not need the perfect cure-all solution before implementing change. Regardless of LEED certification, providers can make incremental changes to become more environmentally friendly.

It’s not just architecture
As healthcare continues to transform and evolve, so does healthcare construction. “In the future,” says Terry, “hospitals and healthcare organizations are going to have to be very creative in constructing an environment that’s attractive and cost-effective.” Not only do healthcare facilities have to provide a healing environment, but they and the architects must prove “that it is the best place to come for care,” says Jarvis.

Terry says that the very idea of what a hospital does is changing. “More and more healthcare will be delivered on an ambulatory basis,” he says. “Hospitals will be for the truly ill.” This trend could save money, he points out. It costs about $1.4 million per bed to build a hospital.

“Increasing financial pressures and litigious healthcare environments will continually motivate providers to upgrade facilities to ‘proven’ standards, using evidence-based design,” Kamp says. In general, Terry adds, the fact that consumers are more savvy and informed will also lead to an increase in competition.

Finally, the industry must consider the possibility of universal healthcare, which could affect hospital design. Wellness and preventive care are also moving to the forefront. “I think more and more people are going to focus on preventive care, on keeping themselves and family and friends well,” says Connie Harmsen.

“It’s not just architecture,” says Terry. “It’s a culture and how you take care of your patients.”